The attitude of international investors towards shares in British companies is clear: they want out.
Global fund managers surveyed by Bank of America said this week that, of all asset categories, the one they had turned their backs on most decisively this month was UK stocks.
‘Contrarian’ investors may feel their ears pricking up. Such investors are attracted by the assets everyone else avoids, in the belief that this is where bargains are to be found and that stock market fashions come and go – what is shunned today may be feted tomorrow, and vice versa.
But how cheap are London-listed stocks relative to their international rivals? We’ve run some simple valuation screens, presented in the graphs below, to find out.
Screen 1: price-to-earnings ratio
As you can see, the London market (as represented by the FTSE 100 index) is not the cheapest – that crown is worn by Hong Kong’s Hang Seng index – but it is towards…
